In recent weeks there has been a vast acceleration of digital within retail, with UK shoppers buying 35% more than before the lockdown, due to the closure of non-essential stores and a reduction in social contact.
This varies by category – online sales of garden products, DIY and home entertainment have soared, whereas spending on clothing and non-essentials has declined, with some exceptions such as gym and sportswear.
Online grocery sales have surged and are set to increase by 25% in 2020. Tesco has doubled its home delivery and click & collect capacity to over 1.2m slots in six weeks and Sainsburys has increased its number of slots by over 75%. A number of older shoppers have tried online grocery shopping for the first time, increasing their online grocery spend by 94% YoY.
55% of online shoppers say they’ve shopped more during lockdown, with 77% stating that they will continue to shop online more. 39% have bought items they wouldn’t normally buy online such as shoes and pet food and 25% have had a positive experience with a new retailer who they will continue to shop with (PFS).
In-store social distancing, consumer concerns about visiting stores and the potential need for the 1.6m people currently shielding to keep doing so, means that the surge towards online grocery shopping is going to continue well into 2020 and beyond.
If bricks and mortar stores are to remain, they will have to work harder than ever to compete with or complement online, to create a ‘phygital’ retail experience. This is in addition to implementing social distancing measures and navigating customers through a positive store experience.
A greater sense of community is being felt by many people in the UK, as lockdown has limited our human contact outside our houses and brought us closer to our neighbours.
- 43% of people say they have felt closer to their neighbours & and local community since the lockdown began
- 43% have shopped for older or vulnerable neighbours
- 50% say they simply smile or wave at each other more (John Lewis)
As consumers pull together to support their communities, they are also looking to businesses to play their role too, therefore, sustainability and community will be a key focus in the future when making purchasing decisions.
77% of people feel more positive about brands that are making the effort to support society during this time (Twitter) and 54% of online shoppers say they will be less likely to shop with retailers that have treated their staff poorly during the COVID-19 pandemic (PFS).
Businesses must therefore be mindful of how they treat their staff, customers and communities and consider their role in wider society and their local communities. Communications must be meticulously planned and supported by authentic policies and practices.
Whilst online retail is flourishing, consumers are expressing appreciation for their local businesses along with those independents who have ‘stepped up’ to support their communities.
Take for example, the Javeds, convenience store owners in Falkirk made headlines and received widespread praise in March 2020 after spending £2,000 of their own money on care and hygiene packs for the elderly and vulnerable.
At Nisa, average transaction value was up 52%, with the volume of transactions up 15% (Revolut), indicating a trend towards customers buying more at their local shops. Selected Nisa stores also launched local home delivery services, with one in Southampton accepting orders via social media and using local taxi drivers to distribute them.
This presents an opportunity for small businesses to build a localised online offering for their communities which combines the ease and convenience of online shopping, with the familiarity and personal service of a community store.
A renewed focus on British goods is also prevalent, with retailers such as M&S showcasing their ‘pride in backing home grown talent’. This is great news for independent British businesses and producers, who should use their heritage to tell their brand stories, to cement their places as proudly British brands, within in their local communities.
Happy at Home & Self-Reliance
With our homes now the backdrop to all aspects of our lives, they’ve become offices, schools, gyms and (virtual) events venues. As a result, we’ve seen a shift towards DIY lifestyle products, covering things like cooking, entertainment, crafting, exercise and socialising.
John Lewis has seen sales of gym equipment rocket by 496% in recent weeks and as families seek to entertain themselves during lockdown, there has been a huge increase in spend on craft items and home baking products, with 40% of consumers saying they are doing more home baking now (Kantar).
With bars pubs closed, alcohol sales have risen by a third, with tequila sales up 175% at John Lewis, as consumers, host ‘Zoom cocktail parties’ and their own at-home events. It remains to be seen how this trend will develop post-lockdown when hospitality venues eventually open and implement social distancing measures, but consumers have certainly proved that they’re able to create their own fun.
This trend towards creating at home extends to the garden too – Waitrose.com has seen a 63% increase in searches for ‘grow your own’ vegetable seeds and sales of garden products have also increased. This has been fuelled in part by the sunny weather but may also reflect a deeper yearning amongst consumers to feel more self-sufficient after seeing empty supermarket shelves during the initial stockpiling which took place in March, following the outbreak of covid-19.
As lockdown eases these trends may subside but consumers have learnt to ‘make do’ and so may realise they can live without certain non-essential items or will continue to make their own.
Businesses will therefore have to work much harder to drive sales of non-essential items and look to accommodate changing customer demands. Businesses are already responding – Pret is speeding up its launch of range of super market coffees in a bid to try and recoup sales of the ubiquitous commuter coffees.